Harder for Sweden’s foreign-born entrepreneurs to get business loans

Harder for Sweden's foreign-born entrepreneurs to get business loans
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Entrepreneurs with a foreign background have more difficulty getting business loans than native-born Swedes, according to a study from the Swedish Agency for Economic and Regional Growth (Tillväxtverket).

Even when other factors such as the size of the company and whether it made a profit, the industry, and the age of the entrepreneur were taken into account, business-owners with a foreign background were still more likely than native Swedish peers to have problems getting funding in the form of loans, credit, or external ownership.

In general, only 12 percent of company-owners saw access to this kind of financing as an obstacle to growth, but that figure was much higher among those with a foreign background, particularly younger entrepreneurs.

“Because it doesn't seem to relate to poor finances within the company, it may depend on relationships between entrepreneurs and funding agencies,” said Corinne Uppman Helminen, project leader at Tillväxtverket, in a statement.

“Perhaps language, culture, and the method of doing business also play a role. We would need to know more about what the banks need in order to be convinces,” she added.

When looking at public funding, there were no significant differences based on the background of the company-owner.

The agency surveyed 10,000 small- and medium-sized businesses for the study, in order to “draw attention to how power systems in society interact, how hierarchies are created and how”.

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